Lionel
S. Lofton and V. Lynn Lofton, both of Lofton & Lofton, of Charleston, and Charles
B. Macloskie, of the Macloskie Law Firm, of Beaufort, for Appellant/Respondent
Lisa Cramer and for Appellants Lofton and Macloskie.

CHIEF
JUSTICE TOAL: These consolidated
appeals relate to several discovery orders in a civil action. Bernard and
Eleanor Breedlove initiated the underlying lawsuit seeking to set aside several
transfers of assets to Lisa and Nathan Cramer on the grounds of fraud and undue
influence. The parties contest several issues on appeal, but the foremost is whether
the trial court erred in imposing discovery-related sanctions on Lisa Cramer. The
Cramers argue that the trial court should not have imposed sanctions, and the
Breedloves argue that the trial court should have imposed more. Additionally, the
Cramers’ attorneys argue that the trial court erred in requiring them to
produce documents and information relating to the location of assets allegedly transferred
from the Breedloves, and the Breedloves argue that the trial court erred in issuing
a protective order making discovery in the case confidential.

Though
these issues are couched as different types of discovery disputes, they deal primarily
with the Cramers’ invocation of the privilege against self-incrimination found
in the Fifth Amendment to the United States Constitution. Because we find that
the trial court did not apply the proper standard when judging the Cramers’ invocation
of the Fifth Amendment, we vacate the trial court’s imposition of discovery-related
sanctions on Lisa Cramer. Similarly, we find that the trial court erred in
ordering the Cramers’ attorneys to produce documents and information which
relate to their representation of the Cramers. The remaining questions on
appeal, specifically, whether the trial court erred in declining to impose
additional sanctions on Lisa Cramer and whether the trial court erred in
issuing a protective order, are not immediately appealable and are therefore
dismissed.

Factual/Procedural Background

The
Breedloves are elderly individuals with substantial assets who reside in Hilton
Head, South Carolina. In their complaint, the Breedloves alleged that they
became acquainted with Lisa Cramer through her employment at the Breedloves’
bank, and that after learning of the Breedloves’ substantial wealth, the
Cramers conspired to develop an enduring relationship with the Breedloves and
to exploit that relationship for financial gain. The Breedloves alleged that
over time, they transferred several million dollars worth of real estate and
liquid assets to the Cramers. During the time of these transfers, the
Breedloves were allegedly suffering from some degree of dementia related to
their advanced age. The Beaufort County Probate Court appointed An L.
Grosshuesch as guardian and conservator for the Breedloves after the Breedloves
commenced this lawsuit.

This
appeal represents the third time this Court has addressed issues arising out of
this litigation. As their first step in defending the lawsuit, the Cramers
requested that the trial court stay the suit pending the resolution of the
criminal actions filed against them relating to these conveyances. The trial
court denied this request, and we dismissed the Cramers’ appeal from the denial
of the stay on the grounds that the trial court’s order was interlocutory, not
affecting the merits, and thus, not immediately appealable.

Next,
this Court addressed the trial court’s denial of the Breedloves’ request for a
preliminary injunction. The Breedloves sought to prevent the Cramers and
others acting on the Cramers’ behalf from transferring or otherwise disposing
of the assets at issue. In so seeking, the Breedloves filed lis pendens
against the subject real estate and sought a preliminary injunction preventing
the Cramers from exercising control over some of the accounts and assets in
dispute. In seeking the injunction, the specific focus of the Breedloves’
concern was a Merrill Lynch account which they alleged initially contained $2
million, but has been almost completely depleted. The trial court denied the
Breedloves’ request for an injunction, and this Court reversed. Grosshuesch
v. Cramer, 367 S.C. 1, 623 S.E.2d 833 (2005).

The
consolidated appeals now at issue deal with several orders related to
discovery. Over the course of this litigation, the Breedloves sought extensive
discovery relating to the amount of assets the Cramers received from the
Breedloves, expenses the Cramers appeared to authorize on behalf of the
Breedloves, and the present location of all assets acquired from the
Breedloves. When the Breedloves received no response to their discovery
requests, they sought and were granted an order compelling Lisa Cramer to
respond to discovery.[1]

The
Cramers again entered no substantive response to the vast amount of Breedloves’
discovery, answering only that any response to discovery would be deemed a
waiver of rights secured by the Fifth Amendment to the United States
Constitution and by Article I, Section 12 of the South Carolina Constitution.
After receiving what were in their view insufficient responses to their
discovery requests, the Breedloves sought an order of contempt and sanctions as
to Lisa Cramer. The trial court ordered Lisa Cramer to fully respond to
discovery and held her in contempt, but imposed no sanctions. In this order,
the trial court additionally prohibited the Breedloves from disseminating any
information acquired in discovery to anyone not directly connected with this
litigation. The purpose of this protective order, in the trial court’s view,
was to guard the integrity of the case and to prevent any criminal harm to the
Cramers from their discovery responses. Lisa Cramer appealed from her finding
of contempt, and the Breedloves cross-appealed the imposition of the protective
order.

Although
the Cramers’ depositions followed this contempt order, the Breedloves’ quest
for information fared no better. Ultimately, the trial court entertained a
second motion for contempt and sanctions arising out of Lisa Cramer’s
essentially blanket refusal to answer questions in her deposition. The trial
court denied this request for contempt and sanctions, and the Breedloves
appealed.

Roughly
around the same time they served their initial discovery requests, the
Breedloves issued subpoenas duces tecum to the Cramers’ attorneys. The
subpoenas requested that the attorneys produce documents evidencing any fees
they had received from the Cramers, withdrawals from the $2 million Merrill
Lynch account, and transfers of cash to the Cramers from the Breedloves. The
trial court denied the attorneys’ requests to quash the subpoenas and
ultimately held the attorneys in contempt. Both attorneys appealed.

As a
result of the parties’ prolific appealing at each stage of litigation, the court
of appeals had several appeals related to this litigation pending by early 2007.
Specifically, the court of appeals had the appeal and cross-appeal relating to
the order holding Lisa Cramer in contempt for her initial discovery responses;
the Breedloves’ appeal of the order declining to hold Lisa Cramer in contempt
for her deposition conduct; and the Cramers’ attorneys’ appeals from their
contempt orders. This Court issued an order certifying and consolidating all
of the pending appeals, and the parties present the following issues for
review:

I.

Did the trial court err in holding
Lisa Cramer in contempt for failing to respond to discovery? (Lisa Cramer’s
appeal)

II.

Did the trial court err in
finding the Cramers’ attorneys in contempt for failing to comply with the subpoenas
duces tecum? (The attorneys’ appeals)

III.

Did the trial court err in
issuing a protective order prohibiting the Breedloves from disseminating any
information or discovery responses to anyone not directly connected with this
litigation? (the Breedloves’ cross-appeal)

IV.

Did the trial court err in denying
the Breedloves’ second request for contempt and sanctions as to Lisa Cramer?
(the Breedloves’ appeal)

Law/Analysis

I. The Order of Contempt

Lisa
Cramer argues that the trial court erred in holding her in contempt for failing
to respond to discovery. We agree.

Both
the Fifth Amendment to the United States Constitution and Article I, Section 12
of the South Carolina Constitution declare that no person shall be compelled to
be a witness against himself in any criminal case. In interpreting the Fifth
Amendment, the privilege against self-incrimination has been explained in
practical terms as an assurance that an individual will not be compelled to
produce evidence or information which may be used against him in a later
criminal proceeding. Maness v. Meyers, 419 U.S. 449, 461 (1975). The
settled law provides that the privilege extends not only to answers that would
themselves support a criminal conviction, but also to answers furnishing a link
in the chain of evidence needed to prosecute an individual. Hoffman v. United States, 341 U.S. 479, 486 (1951).

That
a party has invoked the privilege against self-incrimination, however, does not
end the matter. Instead, it is well-settled that an invocation of the
privilege is confined to instances where a person has reasonable cause to
apprehend danger from his answer. Id. Indeed:

The
witness is not exonerated from answering merely because he declares that in
doing so he [will] incriminate himself - his say-so does not of itself
establish the hazard of incrimination. It is for the court to say whether his
silence is justified . . . and to require him to answer if “it clearly appears
to the court that he is mistaken.”

The Fourth Circuit
has instructed that a court judging the invocation of the privilege against
self-incrimination asks first whether the information is incriminating in
nature, and second, whether there is a sufficient possibility of criminal
prosecution to trigger the privilege. United States v. Sharp,
920 F.2d 1167, 1170-71 (4th Cir. 1990). In determining whether the information
is incriminating, the Sharp court recognized that at least two
categories of potentially incriminating questions exist. First, there are
questions whose incriminating nature is evident on the question’s face in light
of the question asked and the surrounding circumstances. Id. at 1170.
Second, there are questions which though not overtly incriminating, can be
shown to be incriminating through further contextual proof. Id. It is
with these principles in mind that we turn to an analysis of the trial court’s
order holding Lisa Cramer in contempt.[2]

When
comparing this analytical rubric to the trial court’s order of contempt, it is
clear that the order does not apply the correct standard when examining Lisa
Cramer’s invocation of the constitutional privilege. The trial court opined
that the privilege against self-incrimination was completely inapplicable in
the instant case for two reasons. First, the trial court noted that the
Cramers have maintained that the transfers from the Breedloves were gifts.
Second, the trial court emphasized that the Cramers have unequivocally stated
that they intend on testifying at their criminal trial. The Breedloves rely
heavily on these justifications in their argument before this Court, but although
these facts are extremely odd, they are irrelevant to constitutional privilege
analysis.

Dealing
first with the fact that the Cramers have maintained that the transfers from
the Breedloves were gifts, the question when judging the application of the
privilege against self-incrimination does not revolve around what defenses a
party has asserted in a civil action, but whether there is a reasonable
possibility that requiring a party to answer a certain question would provide information
that could be used against the party in a criminal proceeding or would lead to
the discovery of such information. Hoffman, 341 U.S. at 486-87; Sharp, 920 F.2d at 1170. The Cramers are entitled to assert that they did
not engage in any criminal conduct over the course of their relationship with
the Breedloves, and this entitlement applies with equal force in both this
action and the pending criminal action. Just as they would not lose the
protections against self-incrimination by entering a criminal plea of not-guilty,
so too does their assertion in this action that these transactions were
arms-length have no impact on the analysis of whether the Cramers have a
reasonable fear that their answers provided in discovery might be used against
them in a criminal proceeding.

Thetrial court’s speculation about whether the Cramers would testify at their
criminal trial suffers from a similarly fatal flaw. We are aware of no
authority providing that a party waives the application of the privilege
against self-incrimination by stating that they ultimately intend to testify at
trial. Courts employ a high bar when judging the waiver of constitutional
rights. See Brady v. United States, 397 U.S. 742, 748 (1970) (noting
that “[w]aivers of constitutional rights not only
must be voluntary but must be knowing, intelligent acts done with sufficient
awareness of the relevant circumstances and likely consequences.”). In
this vein, we think that a pronouncement that one intends to waive a
constitutional right in the future does not amount to a waiver of that right.
Indeed, it stands to reason that if one says he intends to waive a right in the
future, he is invoking that right in the present.[3]

What
then were the circumstances available for the trial court to consider in making
its decision in this case? The record reflects that the trial court possessed
the following information: (1) that the Breedloves sued the Cramers seeking to
set aside several transfers of assets; (2) that the Breedloves are seeking
discovery as to a great deal of information, some of which deals directly with
their relationship to the Cramers and their transfers of assets to the Cramers;
and (3) that the Cramers have been involved in a criminal proceeding which
relates to their receipt of assets from the Breedloves since before the
inception of this civil action. Given this information, the second step of the
privilege analysis is the easy assessment. It is clear that a criminal prosecution
of the Cramers is not an event which might occur sometime in the future - it is
a present reality.

The
more difficult question, in our opinion, is the examination of the nature of
the questions asked in this case. It is arguable, we think, that any discovery
directed at transfers of assets from the Breedloves to the Cramers might be incriminating
on its face. It would seem that such discovery directly seeks the information
and transactions which are at the heart of the pending criminal proceeding
involving the Cramers. Accordingly, it would appear probable that the Cramers
could have a reasonable fear that their answers to questions focused on this
information would ultimately be used against them in the pending criminal
proceeding.

But
not all of the Breedloves’ focus in discovery was so directed. During
discovery, the Breedloves sought information related to the Cramers’ marriage,
their employment history, and other areas which do not implicate the Cramers’
relationship with the Breedloves or transfers of asserts over the course of
that relationship. Though it is possible that the discovery of information
relating to these subjects could implicate the privilege against
self-incrimination, that is not the only possibility. Indeed, when judging the
invocation of the privilege in response to these and similar questions, it
might have been reasonable for the trial court to ask for more information in
order to effectively judge whether there was a reasonable possibility that
answers to these questions would provide incriminating information. Lisa
Cramer offered the trial court nothing more, and for this reason, a passage in Hoffman seems to ring true:

The
witness here failed to give the judge any information which would allow the
latter to rule intelligently on the claim of privilege for the witness simply
refused to say anything and gave no facts to show why he refused to say
anything.

341 U.S. at 484.

As
this analysis illustrates, the fault for swaying the trial court’s attention
from the proper standard is shared among the parties. For while we have
outlined why the reasons offered by the Breedloves do not measure up, we must
also reject at least part of the Cramers’ argument relating to the
constitutional privilege. The Cramers have maintained that once a witness
invokes the privilege against self-incrimination, that invocation is due a
significant degree of deference and the court may not inquire further. Of
course, the principle of deference to a witness’s fear of self-incrimination is
included in the recognition that a court may only require a witness to answer a
question when “it clearly appears to the court that he is mistaken,” and that
“if the witness, upon interposing his claim, were required to prove the hazard
[of self-incrimination] in the sense in which a claim is usually required to be
established in court, he would be compelled to surrender the very protection
which the privilege is designed to guarantee.” Hoffman, 341 U.S. at 486. But with these principles of deference in mind, courts have nonetheless
instructed that the question of application of the privilege is one for the
court, and that the guiding principle in a self-incrimination inquiry is the
objective reasonableness of a witness’s claimed fear of future prosecution. Sharp,
920 F.2d at 1171. In this case, the Cramers correctly state that the witness’s
fear of self-incrimination is due some deference, but they carry this principle
too far. The final word on the application of the constitutional privilege is
one for the court and the court alone.[4]

As a
housekeeping matter, the parties appear
to have exhibited a great deal of unnecessary confusion regarding the
injunction that this Court previously issued. Specifically, the parties have
expressed confusion regarding a footnote in the Court’s opinion which provides
that “[s]ince possession of the assets is not at
issue in either of the Cramer’s pending legal matters, we do not view the Fifth
Amendment as an impediment to the issuance of a preliminary injunction.” Grosshuesch
v. Cramer, 367 S.C. at 6 n.4, 623 S.E.2d at 835 n.4. The parties have, at times, asserted the position that this
footnote represents a pronouncement from this Court on the applicability of the
Fifth Amendment.

We do not understand the source of the parties’ confusion. An
injunction is binding upon the parties to
an action, their officers, agents, servants, employees, and attorneys, and upon
those persons in active concert or participation with them who receive actual
notice of the order. Rule 65(d), SCRCP. The clear
import of the Court’s footnote is that because the Cramers do not contest that
they possess the property in dispute, there is no reason to doubt that the
injunction will be effective. Any attempt to read more into the injunction relies
upon verbiage that is not there.[5]

In
sum, the tortured procedural history of this case illustrates that debate
regarding the application of the constitutional privilege against
self-incrimination has fueled nearly every dispute brought to the trial court
in this case. The Cramers asked that this action be stayed largely on the
basis that litigating the civil proceeding would undermine their privilege
against self-incrimination, and they have reiterated this concern in their
motion to stay discovery and in response to the motions to compel and for
sanctions. It is equally clear, however, that the trial court did not approach
the question involving the constitutional privilege against self-incrimination
from the proper perspective. For this
reason, we must vacate the trial court’s order finding Lisa Cramer in
contempt. It should not be necessary to reiterate that when judging the
invocation of the privilege against self-incrimination, the trial court must
make a question-specific inquiry, focusing on whether a question is incriminating on its face, whether the question can be
shown to be incriminating through further contextual proof, and whether there
is a sufficient possibility of criminal prosecution to trigger the privilege.

II. The Attorneys’
Appeals

The Cramers’ attorneys argue that the trial court
erred in finding them in contempt for failing to comply with the Breedloves’
subpoenas duces tecum. We agree.[6]

We can resolve this
issue rather quickly, because the documents the Breedloves sought through the
subpoenas are not properly discoverable through the Cramers’ attorneys. Looking
first at the court’s order to Lionel Lofton, Lisa Cramer’s attorney, the order
requires Lofton to produce “any and all documents he has in his possession
which disclose the location of any funds obtained by [Lisa Cramer] from the
Breedloves,” and the order further requires Lofton to disclose the amounts of
any and all funds currently held in escrow or on deposit by him or his firm.
This request is indistinguishable from the discovery the Breedloves sought from
the Cramers, and it is clear that Lofton would only have obtained documents
relating to the Cramers’ finances through his status as Lisa Cramer’s
attorney. The Breedloves cannot discover documents through the Cramers’ attorneys
when the compelled disclosure by the Cramers would be protected by the
privilege against self-incrimination. Thus, although the Rules of Professional
Conduct provide that an attorney may disclose privileged information when
ordered by the court, see Rule 1.6(b)(7), RPC, Rule 407, SCACR, we find
the disclosure ordered here highly improper.

The order directed
to Charles Macloskie, Nathan Cramer’s attorney, provides another illustrative
point. Specifically, the order professes that the Breedloves are seeking the
information described in the subpoenas “in aid of enforcing an injunction
issued by [this Court],” and that “without the information, [the Breedloves]
cannot locate or trace the assets that are the subject of [this Court’s]
injunction.” This justification is completely at odds with the purpose of
discovery and demonstrates a fundamental misunderstanding by the Breedloves of
their obligations in connection with this Court’s injunction. Discovery is, of
course, the process of seeking information from an adverse party to prepare for
litigation, and the discovery sought in this case relates largely to the nature
of the Breedloves’ relationship with the Cramers. The Cramers have refused to
respond to this discovery by asserting the constitutional privilege against
self-incrimination, and this Court’s issuance of an injunction has no impact on
this analysis.

If
the privilege against self-incrimination protects the Cramers from disclosing
the location of their assets to the Breedloves, that is the end of the
matter. The Court’s issuance of an injunction does not grant the Breedloves a
license to use discovery as a tool to ensure that the injunction is being given
effect. As a court order, the injunction is binding on the Cramers, their
agents and attorneys, and anyone in active concert with the Cramers receiving actual
notice of the injunction. Rule 65(d), SCRCP. A party who refuses to abide by
an injunction entered by the court would of course be in contempt of court and
subject to sanctions, and our jurisprudence clearly establishes that the proper
procedure to determine whether a party should be held in contempt is to bring a
summons and a rule to show cause. See Toyota of Florence, Inc. v. Lynch,
314 S.C. 257, 267, 442 S.E.2d 611, 617 (1994). Treating the injunction as a
back door to allow the discovery of otherwise non-discoverable information
gives the privilege against self-incrimination an impermissibly shallow
dimension.

Not
to be outdone, the Cramers also misunderstand an important aspect of this
Court’s injunction. Specifically, the Cramers appear to overextend the
privilege against self-incrimination and treat it as a limitation on what
information a court may ascertain in its own right. Stated differently, the
question of what information the Breedloves may not obtain in discovery is completely
separate from what information a court may require to be disclosed, in
camera if necessary, to ensure that court orders are observed. While the
appearance that the Cramers are using money they obtained from the Breedloves
to pay their attorneys’ fees ought to be of significant concern, and thus, the Breedloves’ desire for
this information is understandable, this issue should be resolved rather
quickly and easily without the involvement of the civil discovery process.

For these reasons, we reverse the
trial court’s decision finding the Cramers’ attorneys in contempt.

III. & IV. The
Protective Order & The Order Denying Contempt

The Breedloves
argue that the trial court erred in issuing a protective order over discovery
in this case and in denying their second request for contempt and sanctions as
to Lisa Cramer. Though these issues raise interesting questions, the fact
remains that discovery orders, in general, are interlocutory and are not
immediately appealable because they do not, within the meaning of the
appealability statute, involve the merits of the action or affect a substantial
right. Hamm v. S.C. Pub. Serv. Comm’n, 312 S.C. 238, 241, 439
S.E.2d 852, 853 (1994); Wallace v. Interamerican Trust Co., 246 S.C.
563, 568-69, 144 S.E.2d 813, 816 (1965).[7]

Conclusion

For
the foregoing reasons, these appeals are vacated in part, reversed in part, and
dismissed in part. Specifically, we vacate the trial court’s order finding Lisa
Cramer in contempt; we reverse the trial court’s finding of contempt as to the
Cramers’ attorneys; and we dismiss the remaining appeals as interlocutory and
not immediately appealable.

MOORE, WALLER, PLEICONES and BEATTY, JJ., concur

[1] Counsel for Nathan Cramer did not appear at the hearing on the motion to
compel. From this point on, the parties appear to have been content to
litigate these discovery disputes solely from Lisa Cramer’s perspective.

[2] As our recitation of the law illustrates, there is a great deal of
jurisprudence interpreting the Fifth Amendment’s privilege against
self-incrimination and setting forth clear guideposts for judging an invocation
of the privilege. The parties have not offered any arguments as to how the
analysis might differ under Article 1, Section 12 of the South Carolina
Constitution, so we assume in this case that the analysis under the two
provisions is identical.

[3] The case Raffell v. United States, 271 U.S. 494 (1926), is not to the
contrary. That case deals with the entirely different question of whether
inconsistent conduct with respect to the invocation of the Fifth Amendment may
be used as impeachment evidence if a party takes the witness stand.

[4] Though the trial court’s protective order regarding discovery is the subject of
a separate issue on appeal, we note that the use of protective orders has been
widely rejected as a prophylactic measure which cures the compelled disclosure
of incriminating information. As this Court and the federal courts have made
clear, if the privilege against self-incrimination applies, the government must
either be content with having no response to its inquiry, or must grant the
witness immunity. See State v. Thrift, 312 S.C. 282, 301, 440 S.E.2d
341, 351 (1994) (interpreting S.C. Const. art. I, § 12); Kastigar v. United
States, 406 U.S. 441 (1972) (addressing the Fifth Amendment). Although
this principle is admittedly problematic in the civil context because neither a
civil plaintiff nor a judge in a civil action possesses the power to grant a
witness immunity, the principle simply establishes that in a civil action, a
court may not compel a witness to disclose information to an adverse party if the court finds that the privilege against self-incrimination is properly
asserted.

[5] Furthermore, although the issue is not raised in this appeal, the parties expressed
confusion in the trial court on the issue of posting a bond for the
injunction. In our review of the trial court’s denial of an injunction, the
only issue presented was whether the trial court erred in holding that the
Breedloves had an adequate remedy at law to secure the $2 million originally in
the Cramers’ Merrill Lynch account. We held that attachment was not an
adequate remedy at law, and we remanded the matter to the trial court to
proceed accordingly. The rule governing the issuance of injunctions controls
whether the Breedloves are required to post a bond to secure the injunction in
this case, see Rule 65(c), SCRCP, and the proposition that this Court
somehow suspended the operation of this requirement is wholly inaccurate.

[7] We take this opportunity to reiterate that while an appeal is pending, a lower
court cannot act on matters affecting the issue on appeal. See Rules
205 & 225, SCACR. In the instant case, the trial court’s orders dealing
with contempt did not run afoul of this proscription, because while the trial
court’s first order deals with the subject of the Cramers’ initial discovery
responses, the second order deals with the subject of Lisa Cramer’s responses
to questions in her deposition.